Moment Birmingham council Labour chief fields questions on video call

Zooming in from holiday as his city crumbles: Moment Birmingham council’s Labour chief – handpicked by Keir Starmer – fields questions on video call ‘from New York where he is celebrating his 50th birthday’ as authority goes bust

The Labour leader of Birmingham council was slammed today for being on holiday as the authority goes bust.

John Cotton, who was handpicked for the role by Keir Starmer, is said to be in New York for his 50th birthday.

He conducted an interview via video link yesterday – with a totally white background – as it was announced that a section 114 notice had been filed.

That means financial officers believe the council cannot meet its liabilities, and all new spending will stop immediately with the exception of protecting vulnerable people and statutory services.

There is also speculation that residents will face a 10 per cent hike in council tax, as happened when other councils ended up in a similar plight.    

John Cotton conducted an interview via video link yesterday – with a totally white background – as it was announced that a section 114 notice had been filed

Birmingham City Council has declared itself effectively bankrupt after facing a £760million bill

The Labour-led council said in June it faces an equal pay liability of between £650million and £760million, which is growing at between £5million and £14 million a month and which is now estimated to be more than £1 billion.

It is also faces an in-year financial gap in its budget which currently stands in the region of £87million.

Tories have blamed Labour ‘incompetence’ for the meltdown. 

Mr Cotton was selected by the ruling Labour NEC to run the council in May after a report branded the party group ‘dysfunctional’. 

He was criticised for not attending a council cabinet meeting in person yesterday at which the section 114 notice was confirmed.  

Speaking to BBC Radio West Midlands by video-link against a blank backdrop, Mr Cotton said the council would ‘continue to deliver on essential services like children’s safeguarding and social care, social care for adults, education, waste collection, road maintenance and library services’.

He insisted statutory services would continue for the city’s 1.1million taxpayers.

A local Tory source said Mr Cotton was known to be in New York celebrating his 50th birthday.

Asked whether that was the case, a council spokesman said: ‘Councillor Cotton is away on a long-standing family engagement but has been working around the clock since the Section 114 Notice was published.’ 

Gary Sambrook, Conservative MP for Birmingham Northfield, told MailOnline: ‘If anyone wants to see how Labour would behave in Government then look no further than Birmingham. 

‘Starmer’s man was picked without a vote and when things get tough is nowhere to be seen. 

‘Labour have bankrupted Birmingham and they’ll do the same to the country.’ 

Issues with equal pay settlements at the council have been ongoing for well over a decade.

In 2012, the Supreme Court ruled in favour of 174 low-paid women workers at the council to ensure they were paid equally, which effectively extended the time workers have to bring equal pay compensation claims from six months to six years.

That added to a number of previous equal pay settlements dating back to 2006.

It was estimated at the time that existing and future equal pay claims could cost up to around £750 million, which the council had to borrow hundreds of millions of pounds to settle.

Sir Keir said he ‘feels’ for the city’s 1.1million taxpayers, but insisted that councils across the country were also struggling

The liability has since grown to the current level, with the council unable to pay the bill from existing reserves as its entire revenue budget for all services annually stands at around £750 million.

The council’s deputy leader, Sharon Thomas, said the local authority has ‘had £1billion of funding taken away by successive Conservative governments’, which has contributed to the issue. 

Speaking on BBC Breakfast this morning, Sir Keir said he ‘feels’ for the city’s 1.1million taxpayers.

He said: ‘I feel for the residents affected by this because they’ll be very worried about their services.

‘I think, if you take a step back from Birmingham, you will see there are versions of this across the country.

‘And that’s because, for 13 years, local authorities have been stripped of the funding they need.

‘So we will have to look at that again.’

Meanwhile, talks remain ongoing to safeguard the jobs of thousands of staff at the authority, with Unite – which represents hundreds of workers at the organisation – claiming the council’s bankruptcy came as a result of ‘chronic financial mismanagement’.

A Government source said: ‘Sadly this is another example of a Labour administration running out of other people’s money and a red alert warning for a Keir Starmer-led government.’

The Conservative Mayor of the West Midlands, Andy Street, said promises from the council to produce a plan for how to settle the liability had not been produced.

He said: ‘The city of Birmingham deserves so much better and, truthfully, I am incredibly concerned that citizens – and the services they rely on – have been let down in this way.’

Birmingham becomes the latest of several councils to issue section 114 notices this century, after Hackney, Northamptonshire, Croydon, Thurrock and Woking.

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